Sunday, March 18, 2012


The German tanks and infantry were stymied in their Blitzkrieg across Russia when they encountered crowded urban fighting. Much of the maneuverability advantage that their superior mechanized divisions had was lost in the crowded streets and rubble of the major Russian cities. The defenders were able to gain the advantage over the Nazis while building their own reserves for the counter attack on an expended and weakened enemy. Right now it appears that a similar strategy is in place economically with our "trading partners" in the East. The hegemony of the empire is mired down in its blitzkrieg of the world and is struggling in urban fighting with the reserve currency status of the dollar and euro hanging in the balance. Many of our trading partners have lost confidence in the long standing status of the dollar and are maneuvering into other exchange vehicles that will prevent further plundering of their natural resources and vested trading interests..

Grand economic supercycles result in dramatic transformations just as this supercycle will. Headlines run daily regarding the debt debacle in Europe but spend little time addressing the same mathematics in the U.S.. Is this an accident? Of course not. There are few accidents occurring with the controlled news cycle now. This is a systematic recapitalization of the big banks with a back door bailout to many of the largest private bond-holders. Most of the real money is coming in the form of further debt being heaped upon the populace of the affected countries. This guarantees a further drag on their chances of long term economic growth and recovery. This is why you hear many money managers recommending moving more and more long term assets into more developing countries not burdened by high debt.

Ultimately there will be a dramatic devaluation of the dollar. Most likely there will be some fear trades over the next couple of years that push people into the dollar to keep it somewhat least relative to the Euro and Yen.....but ultimately the dollar will tank. There will be no other way to repay the debt without creating inflation. These will be interesting times ahead with the slow decay of the freedoms and values that we thought under-pinned this country. The moral decay and dumbing down of a once proud country is becoming more and more obvious.....except of course to the most oblivious out there. They will never change and they will be the first to put the gas pellets in the chambers. gl


  1. Yep, at this point if a person can't see it, you have to chalk it up to willful blindness. jd.

  2. Not all the times we experience recession and inflation, but in my own opinion this will depend on the people who are designated to perform the role if he or she can handle such tasks according to his/her plan.

    Vhinz from Depression-Free Blog

  3. Phil Davis of Phil's Stock World writes that he is having a hard time being bullish, but tends to think that bullishness will continue. He is redrawing some of his charts, believing that a S&P level of 1600 is possible. He believes that with the Central Banks throwing so much money around, that the market will find its way higher. And, if some hyperinflation shows up, a DOW of 20,000 is possible.

    I was all set to sell another one of my kids mutual funds this past Friday. But, then I figured, "What the heck", and kept their money in the casino.

  4. I like the call is counterintuitive unless you realize the game and its print print print

  5. i look for some pull back soon and sideways action to work out the overbot indicators

  6. Kli,
    I don't often get to watch CNBC, but I had it on this am before I left the house. I heard (I think it was Joe Kernan) say: "Do you know that CNBC is now being watched everywhere?" Or something to that effect.
    Well, it sparked a memory of the Dot com days when CNBC was on everywhere and people just watched and marveled as the market went higher.

    I wonder if the PTB are going to bubble this up higher & higher just like then, and suck everyone into the market.

    1. yes....they are trying to get the money off the sidelines......and yes the sheep will be slaughtered again when that happens......

  7. Waiting for the deficit numbers at 2 PM, looks like it will be up over $200 Bil. in ONE month! Oh, my. Gold/silver should be breaking out on that report but I'm not holding my breath.

  8. Bank stock volume outta sight. Everyone here should take note that the Potus gives his acceptance speech here(Charlotte) from BAC stadium. Sure wish I had bought it back under $5...I Knew it, I Knew it, lol. Btw, our economy has certainly picked up, lots of activity with the DNC here in early Sept. Restaurants, malls are packed.

  9. its a waiting game now sis....hold tite

  10. there is a stealth move underway on miners accumulation...the fly in the ointment will be when the big miners start acquiring the juniors....they can only sit pat so long....I am seeing some movement but not a rush AUQ last year and a few others....but it will be signalling the next leg up

  11. Looks like a double top playing out on the S&P from 2008. Problem is when they let the air out from these levels it will take the miners with them. You may have a big initial beating in the miners in a pullback even if physical gold continues to rise.

    An attack on Iran will not be a walk in the park as stated in the NYTimes propaganda article, it will have severe political and economic fallout for the US. The question is when and the impact to a diversified portfolio of Alpo and toilet paper. Misplaced my geiger counter so will have to pick up a new one before the next rush, mainly to sample sea food and drinking water.

  12. "there is a stealth move underway on miners accumulation...the fly in the ointment will be when the big miners start acquiring the juniors....they can only sit pat so long....I am seeing some movement but not a rush AUQ last year and a few others....but it will be signalling the next leg up"

    Mr. Kli,

    The junior miners are a tough lot to sort through. Not sure what is actually trash or treasure. The juniors, that I have on my watch list are NG,AZK,RBY,RIC.

    I hope you are right about the stealth accumulation. I bought some EGO on friday. Hopefully it's 200day holds on the weekly chart. Either way, I still liked the risk/reward on that stock.

    By the way, nice to see your blog back up.